The Bookseller.com

3rd December 2008

Gayle Feldman is The Bookseller's US correspondent.

Nervous in New York

21.05.08

The book business may be heading to sunny LA for BEA at the end of the month, but the little gray worry clouds continue to hover as executives at many houses voice concern about titles "not moving," and ponder what will become of Borders. But undoubtedly the most nervous people in New York right now work under the Random House roof.

The drumbeat that began at LBF reached its crescendo this week, when Bertelsmann finally announced that Random CEO Peter Olson will leave at the end of May. The real surprise was his successor, 39-year-old Markus Dohle, who ran Arvato Print, and whose name had not been floated among likely candidates.

Was Olson pushed, or did he jump into the new life of an academic? The awkward timing of the announcement, before he could reveal what his university affiliation will be (although his new home will be in Harvard Yard), would seem to indicate the former, but there are reasons to think that chairman Hartmut Ostrowski's insistence Olson "will be leaving of his own initiative" may be closer to the messy truth.

After he had famously fired Ann Godoff five years ago, Olson survived serious fallout from a New York Times profile that, among other things, revealed he had also considered firing Knopf's Sonny Mehta. He survived a longstanding reputation for inscrutable opacity. This winter he survived double pneumonia.

Near-death experiences don't just spawn bestsellers about communicating with the "other" side; in most people, they concentrate the mind wonderfully well about living this life. Ten years of running RH is a long and tiring time.

With articles about a departure splashed across the papers, the company had to act to quiet the rumour mill and stem internal uncertainty. The word came the same day as a board meeting in New York at which Ostrowski was present. In big corporations, the timing of board meetings and major announcements goes hand-in-hand; the dotting of the "i"s in Olson's new life was far less crucial. A corporation has its own imperative: Dohle's appointment, in Ostrowski's words, was "strategically important."

Ever since Bertelsmann bought the Newhouse-owned Random House and merged it with Bantam Doubleday Dell a decade ago (a move engineered by Mr. Olson that received plaudits from his bosses), integration has not been seamless.

There were problems under Newhouse that did not just go away, and the merger created other issues. It is a behemoth. On some levels it happens to be a very well-oiled machine, but on others, there are too many parts of parts. Olson's "new" Random House is not so new ten years on.

Random didn't have a good US year.  In Ostrowski's words, "stability" needs to become "growth." He says that Dohle is "very capable of mastering turnarounds" and that the business "urgently needs new impetus."

Dohle may have overseen double the number of people at Arvato as at Random House, but RH has a much higher, more public, profile. Dohle has the energy of being twenty years younger than Olson, but brings no book publishing or American experience.

For Ostrowski himself, Arvato was the springboard to the top of the pile. He diversified from printing into running call centers and billing systems and other non-traditional businesses. Now he talks of marrying publishing and "education services."

There is a curious echo from the past. In 1966, when Random House's two founders sold their baby to RCA, the talk was of marrying RH's books to RCA's hardware and making pots of money with "teaching machines." It didn't pan out.

A number of RH editors have said that although they never penetrated Olson's armor, they respected him and his devotion to books, and that their work was better for the way he spared them the extreme number crunching that goes on elsewhere. They point to the sliding dollar and economy and the good years past.

Two things are certain. In any industry, new CEOs like to pick their own key men, and it helps if they come from the trusted powerbase that the CEO himself knows best. Second, RH people are wondering, not without a certain irony, whether they will come to regard Peter Olson's decade-long tenure as "the good old days."